There is a certain maximum range in product diversity which has to be respected to successfully extend your brand. The only difficulty is to determine this maximum range, since it will be different for every single brand.
The Virgin Group for example is a business conglomerate which offers over 200 different products or services, including: air travel, soft drinks, mobile phones and even financial services. By simply attaching the name “Virgin” to every product they market, they keep successfully expanding their product range. The main reason they can pull this off for every kind of new product, is because almost everybody knows that Virgin is a conglomerate, which means people won’t directly link Virgin to a specific product.
BiC on the other hand, is a company that is far-famed for it’s writing equipment. Even the BiC-logo pictures a man holding a huge pen. Nevertheless, BiC decided to expand their product range to lighters and shaving equipment. Consumers accepted this brand extension, since all products offered by BiC were qualitative disposables. Later, BiC launched a perfume, but this was a complete fiasco. People didn’t want to wear a perfume, which is considered a luxury good, that is linked directly to cheap disposables. BiC had crossed it’s maximum range in product diversity and paid the price. Nowadays, BiC is once more flirting with this maximum range, offering a cheap, basic mobile phone. I hope for BiC that this turns out to be a successful brand extension, but I personally wouldn’t even consider buying a BiC-phone, when brands like Nokia also offer basic phones in the same price range.
Recapitulatory, I wouldn't accept Alexandre's statement about wide product variety right away, but there certainly is a grain of truth in it.
Bram Van Hijfte
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